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Municipal bond market recognition of pension reporting practices

Authors
Journal
Journal of Accounting and Public Policy
0278-4254
Publisher
Elsevier
Publication Date
Volume
2
Issue
3
Identifiers
DOI: 10.1016/0278-4254(83)90022-4

Abstract

Abstract The purpose of this study was to examine the usefulness of current municipal pension accounting disclosures for assessing municipal bond risks and returns. An empirical assessment of the association between various pension ratios and bond ratings, bond yields, and market risk revealed little explanatory power in the pension variables. We posit that the results probably stem from current practices that reduce the relevance and reliability of pension accounting numbers. Thus, standardization of practices and increased disclosures as proposed by the NCGA may have positive effects on the usefulness of pension disclosures for creditor decisions.

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